A recent report by the Economic Advisory Council to the Prime Minister (EAC-PM) sheds light on the evolving economic landscape of India, revealing significant shifts in the wealth distribution among states.
The analysis, released on Tuesday, highlights how Southern states have risen to prominence, while some other regions, notably West Bengal, have struggled to maintain their economic foothold.
The report underscores that Southern states—Karnataka, Andhra Pradesh, Telangana, Kerala, and Tamil Nadu—have emerged as major contributors to India's economic growth.
Collectively, these states now account for 30% of the nation's GDP, reflecting their robust economic performance since the economic liberalisation of the early 1990s. Their success is further exemplified by their per capita incomes, which exceed the national average.
In stark contrast, the Eastern states have not kept pace with this growth. West Bengal's economic trajectory, in particular, is notable for its decline. Once a leading economic powerhouse, contributing 10.5% to India's GDP in 1960-61, West Bengal's share has dwindled to a mere 5.6%.
The state’s per capita income has also fallen, dropping from 127.5% of the national average to 83.7%. This decline is perplexing given West Bengal's historical advantages and strategic location.
The report suggests that West Bengal’s continuous economic decline, despite its earlier advantages and significant maritime access, warrants further examination. The state's persistent underperformance stands out among maritime states, which generally have fared better.
Meanwhile, Maharashtra remains a leading contributor to India’s GDP, though its share has decreased from over 15% to 13.3% in recent years. Despite this reduction, Maharashtra's per capita income has risen to 150.7% of the national average by March 2024, indicating substantial growth in individual wealth.
In the north, Haryana and Delhi continue to perform strongly, with Delhi holding one of the highest per capita incomes in the country. The contrast between Punjab and Haryana is particularly striking.
Punjab, which benefited greatly from the Green Revolution, has seen a decline in its relative per capita income post-2000. In contrast, Haryana has experienced significant economic growth, surpassing Punjab in key metrics.
The report highlights the divergence in economic performance between these states and suggests a need for further investigation into the factors driving these trends. Haryana’s rise, once lagging behind Punjab, now illustrates a reversal of fortunes in the region.
On the other hand, Uttar Pradesh and Bihar, among the poorest states, have seen their contributions to India’s GDP decrease. Uttar Pradesh’s share has dropped from 14% in 1960-61 to 9.5%, while Bihar, despite being the third-most populous state, contributes only 4.3% to the national GDP.
The report paints a picture of a nation experiencing significant regional disparities in economic growth. While some states have surged ahead, others have struggled to maintain their economic standing, reflecting a complex and evolving economic landscape across India.
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